Fewer and fewer aged individuals are able to comfortably retire after their working age. Many people do not have sufficient savings or the right investment put in place when they are in their 40’s through to their 60’s. This implies that when they exit their jobs, they have insufficient financial wealth to last them their golden days. Here are the best financial tips that I constantly teach my kids in hopes of their future financial success.
Start Saving as Soon as Possible
When they land their first job, they might think that it’s too early to save. However, this is the best time to start saving. To ensure a comfortable old age life, they need to have saved enough. This is only achievable if they begin with their first jobs. They can utilize the power of compounding returns.
Start Investing in Their Retirement Now
Investing in a retirement account is a viable option they need to take. When their employer matches their retirement contributions, they need to take advantage. In case a job does not provide them with 401k or IRA plan, they should think of opening one for themselves.
Create an Emergency Fund
It is paramount that our kids consider having an emergency fund that can cover up to 12 months of expenses. This is because unexpected events can come their way forcing them to put their figures on savings. They would be better off with an emergency fund because it prevents them from penalties that come when they use money kept in your retirement accounts. Have them keep the emergency fund kept in an account that is penalty-free for things like early withdrawals.
Having a Grip on Their Taxes
Young adults and teens need to know how income taxes work in order for them to plan for their earnings. When an employer offers you a salary, you may want to know if you have sufficient amount after taxes to meet all your financial obligations.
Protect and Guard Their Own Health
Young people need to have health insurance in their early days when they get their first job. You do not know what may happen tomorrow. They may be employed today and a few months down the line, they could encounter a car accident or even trip down the stairs.
What’s more, the should keep themselves healthy with the obviouys by eating nutritious food, managing their weight, staying away from smoking, and reducing alcohol consumption. Driving defensively may be another thing they need to do because it reduces the chances of being involved in accidents. When they protect their health, it will pay now and in old age. In this case, they also won’t be spending a lot on medical bills.
With these tips up their sleeves on how to secure their finances starting from young age through middle age to old age, they can be able to have a comfortable after-retirement life. The earlier they start thinking and planning for their financial path, the easier for them to have a sound financial future. We need to invest, build, and guard our wealth and health. Planning for emergency events will allow us avoid tapping on what we have saved or invested.